QDROs
A QDRO is an order from the court to the retirement plan administrator spelling out how the plan’s benefits are to be assigned to each party in a divorce. QDROs should be drafted by professionals who what they are doing – an attorney or someone who specializes in QDRO’s. At our firm, we do specialize in QDROs.
Plans divisible by a QDRO include defined contribution pension plans, defined benefit pension plans, 401(k)s, thrift savings plans, some profit sharting and money purchase plans, Keogh plans, tax sheltered annuities, ESOPs, and the old PAYSOPs.
Plans that are not divisible by a QDRO include some plans of small employers not covered by ERISA, and many public employee group funds such as police and fire groups and city, state and other governmental employees including federal employees.
The QDRO is sent to the employer’s pension plan administrator. The QDRO states how the pension is to be divided between the two spouses. This amount can be from zero to 100% depending on how they have divided the other assets. It does not automatically mean 50/50. A phrase often used by attorneys is , “We are going to QDRO that pension,” and they are thinking about a 50/50 split because that is most typical. By definition, however, it does not mean 50/50.
Typically the QDRO not only states how the money in the plan is to be divided, but also what happens to the assets when either party dies.
For more information on my QDRO services, please call me at (502) 439-9828
